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Energy price cuts do not go far enough

February 8, 2012 1:49 PM

The Welsh Liberal Democrat Assembly Member for South Wales West, Peter Black has described recent announcements of future price reductions by big energy suppliers as too little too late compared to the massive price hikes of the last two years.

All the big energy companies have followed the lead of British Gas and announced that they are reducing prices by around 5% at some point this spring.

Mr. Black said: "Fuel poverty in Wales has soared to 41% of households which is the highest in the UK. Many of those struggling to cope live here in South Wales West. Obviously, any price reduction is welcome as it will help hard-pressed families throughout our region. However, one of the main reasons for household incomes coming under pressure has been the price hikes that the energy giants have imposed on us all over the last two years. A cut now is the least that they could do.

"I am concerned that most of the Big Six energy companies have cut the price of one fuel only. For instance, British Gas has only cut electricity prices, EDF and Scottish and Southern Energy (which is SWALEC around here) have only cut gas prices. British Gas has twice as many gas-buying customers as electricity customers. EDF and SSE have many more customers who buy electricity than gas. That does not appear to be a coincidence.

"When the Big Six pushed their prices up, gas and electricity prices rose together. That us not the case when we experience price cuts. Wholesale prices have fallen from their 2011 peak by 19% for gas, and 25% for electricity, and yet we are only being offered a 5% reduction that will come into effect as winter ends, and fuel use falls.

"The energy companies are indulging in yet more cynical PR posturing. If they were serious about playing their part to tackle fuel poverty they would reduce prices across both fuels, increase the size of the cut to reflect their falling costs, and introduce it immediately.

"It is obvious that they will not change until they are forced to do so. That is why the Competition Commission needs to investigate this latest manoeuvre urgently."